FEASIBILITY STUDY ON UTILIZATION OF WOOD RESIDUES IN SERBIA. Dr. Mladen Ilic

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1 FEASIBILITY STUDY ON UTILIZATION OF WOOD RESIDUES IN SERBIA Dr. Mladen Ilic Financed by: Prepared by:

2 Objectives of the Study: Actual state: - review of forests in Serbia - assessmet of wood resource - utilisation of wood and wood residues - energy potential of wood residues Possibility of wood pellets production in Serbia: - competitivness to other fuels - availibility of resource - propsective regions for pellet production - main stakeholders of pellet production - economic evalation of pellet production

3 Energy potentional of RES and consumption of fossil fuels in Serbia million toe * Forest biomass residues 1,0 Agricultural biomass residues 1,7 Small Hidroenergy 0,4 Geothermal 0,18 Coal Consumption in Industry & Residential sector 0,97 Liquid fuel consumption in Industry 0,45 Total energy consumtion in Serbia 14,5 (*) 1 toe (ton of oil equivalent) = MJ

4 Resource of biomass North - agricultural area, Central and South - mountain region rich in forests. Forests 1.98 million ha (25.6%) forest area > 0.05 ha (500 m2) 146 total no. of municipalities in 28 municipalities forests cover more 40% of the territory of the municipality Source: Serbian Statistical Office

5 Structure of forest ownership State forests Private forest No data Source: Serbian Statistical Office

6 Wood Residues in Forestry Average share of different categories of wood in the total volume of tree technical round wood 16 % Commercial product stacked wood 42 % Commercial product bark of round wood 4 % remain in forests forest residues with bark 9 % partly used thin branches with bark* 11 % partly used stumps with large roots 18 % remain in forests total 100 % - Utilization of forests and forest residues in plain region 100% in mountain region less - Total wood cutting: 2,6 million m3 - Theoretically remain about 1.2 million m3 of wood residues, - Practically (without stumps) about m3 wood residues in forests Residues for pellet production m3 - forest residues (without stumps) + min m3 - unused wastes in small sawmills max m3 - wood wastes in all sawmills - trade of fuelwood 1.41 million m3

7 Wood Waste in Wood Processing Industry wood raw material sawdust wood chips board industry sawmills pulp and paper mills by-products used internally sawdust and wood chips by-products used internally sawdust and wood chips by-products used internally wood based panels pellets and briquetts boards heating and electricity consumers electricity paper products - in what extent wood waste will be used for different purposes depends on the market

8 Energy consumption / prospective consumer Final energy consumption (toe) of fossil fuels for local heat production only industry residential + agriculture coal liquid fuel natural gas fuel wood wood pellets (possible production) (production t/year) Final energy consumption consumption of fuel. 1 toe ton of equivalent oil = 41,86 GJ/t 18 GJ /t - Heating value of wood pellets

9 Attitude of main stakeholders towards the production and utilization of wood waste for energy purposes Resource Public (State) Companies Srbijašume and Vojvodinašume Private forest owners Wood processing companies to produce more valuable products - internally used wastes - available wastes Producers of pellets existing wood processing companies new investors Consumers to have cheap and reliable heating Householders Public centralized heating systems (schools, hospitals, municipality buildings) Private centralized heating systems Boiler manufacturers

10 State of wood waste technology applied in Serbia Technologies for production of solid biofuels: NO wood chips intentionally produced to be fuel YES - briquettes and pellets production Technologies for utilization of solid biofuels (woodchips, pellets, briquettes) OLD equipment in operation (boilers, furnaces) not modern equipment of domestic manufacturers (standards, rules on eff.) few manufacturers of medium boilers for wood residues 1 manufacturer of small boilers for pellets with automatic feeding no: electricity generation yes: co-combustion biomass with fossil fuels

11 O - Big Pellet plants in 2009 O - prospective locations for new plants - sawmills (100 out of 1500) - big wood processing companies Municipality Sr. Mitrovica Šid Mali Zvornik Krupanj Loznica Prijepolje Priboj Kraljevo Novi Pazar Raška Boljevac Bor Despotovac Vranje Vladičin Han Surdulica Pirot Babušnica Bela Palanka Forest area (ha) Possible production of pellets (t/year) based on forest + from wastes sawmills

12 Economic analysis of wood pellets production Parameters: Production: tons /year Investment cost: 1 million (land, buildings, equipment) Price of wood waste: 27 /t (including transport) Minimum pellet price (B-C=0, benefit - costs discounted) for Serbia: /t (VAT excl.) for EU: /t (VAT excl.) Price of pellets for B/C > 1,1 for selling in Serbia: 80 /t for export in EU: 120 /t (without VAT, transport included)

13 financial parameters: not relevant: - Simple Pay Back Period, -IRR relevant: B-C, B/C (benefit / costs, discounted) Influential operating costs: - costs of raw material - transport costs (raw material, pellets) - costs of electricty (shifts) Number of working shifts

14 Prices of different fuels in Serbia and cost of heat Retail price* Heating value Cost of heat ** Brown coal din/t 18,2 GJ/t 30,5 ( /MWh) Lignite dry din/t 17,2 GJ/t 28,5 ( /MWh) Lignite raw din/t 9,2 GJ/t 30,0 ( /MWh) Light fuel oil din/m 3 37,9 GJ/m 3 105,6 ( /MWh) Heavy fuel oil din/t 39,7 GJ/t 51,2 ( /MWh) Natural gas 34 din/m 3 0,0333 GJ/m 3 53,8 ( /MWh) LPG din/t 46 GJ/t 89,3 ( /MWh) Fuel wood in Bgd din/m 3 14 GJ/t 31,2 ( /MWh) Fuel wood in Pirot din/m 3 14 GJ/t 15,6 ( /MWh) Wood pellet din/t 18 GJ/t 22,2 ( /MWh) Electricity 3,265 din/kwh 0,0036 GJ/kWh 54,9 ( /MWh) * 1 = 80 din ** Conversion (combustion) efficiency is included Prices of electricity and natural gas are not retail prices, since there is a special tariff system for these kinds of energy. VAT is afterwards included for obtaining cost of heat. VAT for all energy carriers is 18%, except for natural gas and wood 8%.

15 Thank you for your attention Dr. Mladen Ilic Energy Saving Group Belgrade, Serbia